Vedder Thinking | News Sam Tyfield Weighs in on Proposed Global CCP Ratings in FOW Article
Sam Tyfield, a Partner in Vedder Price's London office and member of the firm's Investment Services and Finance & Transactions groups, spoke to Futures and Options World (FOW) regarding the potential introduction of a global rating over central counterparties (CCPs).
Last month, the rating agency Moody's Investors Service developed the proposed global CCP rating because clearinghouses play a key role in risk management of financial markets and should therefore be subjected to the same level of regulation as other firms. The new Clearing Counterparty Rating would be designed to help assess if a CCP is able to meet its clearing and settlement obligations as well as the financial loss that would result if a CCP were unable to meet its necessary obligations.
Mr. Tyfield commented on the proposed rating, stating that CCPs are becoming more important, especially in today's trading landscape. However, he later added a note of caution, stating, "I do wonder what, if any, effect from a collateral, value at risk and risk management perspective that the new methodology will have, at least from regulators' perspective."
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